3 Of The Best Cities For Investment Properties In 2019

The golden rule of real estate investing is still alive and well: location, location, location. The area in which you choose to invest is of the utmost importance—to you and your bottom line. It is worth noting, however, that the definition of a great real estate location is contingent on several factors—each of which are subject to cyclical trends, year in and year out. That said, there’s one recurring theme at the forefront of today’s best markets for investing: affordability. Investors will quickly learn that the best cities for investment properties are also some of today’s most affordable.

Overview

General consensus suggests the housing market is starting to show signs of slowing down. Following years of historic appreciation onset by nationwide inventory shortages and steadily growing demand, the real estate industry is finally expected to temper over the course of 2019.

Nationwide, home sales should decrease, albeit slightly. Meanwhile, most markets won’t be able to maintain the pace of price increases we have seen in the last few years, all but guaranteeing a slightly less bullish increase in home values. It is important to note, however, that these developments are in no way condemning the 2019 real estate market, but instead are ushering in a return to normalcy.

Despite the nationwide tempering, not all markets across the country are primed to regress in the coming year. There are a handful of cities resisting the impending return to normalcy. Instead of giving into the deceleration expected to occur in most regions, some cities boast encouraging economic indicators. There are a number of cities that currently have everything investors should look for in a promising market: strong economies, an influx of new residents, affordability, new home construction, solid unemployment rates, relatively high household incomes and other factors.

Keep reading to discover some of the most promising cities to invest in over the course of the next 12 months:

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The Top Real Estate Investment Markets

Following years of historic appreciation rates, many of today’s most popular cities are simply too expensive for the majority of buyers to participate in the market. As a result, prospective buyers have flocked to secondary and tertiary cities in hopes of finding something more affordable. In the process, the resulting exodus from more expensive cities has paved the way for smaller cities to carve out their own thriving real estate markets. Consequently, the three cities listed below have used their own relative affordability to spark a real estate resurgence in 2019:

• Lakeland, FL
• Grand Rapids, MI
• El Paso, TX

Lakeland, FL

Lakeland, FL is a prime example of why location remains the golden rule of real estate. Located within driving distance of Tampa, Orlando, and the famed Walt Disney World Resort, Lakeland has garnered the attention of cost-conscious commuters who work in some of Florida’s largest cities.

In other words, Lakeland represents the epitome of a transplant city where residents can enjoy a lower cost of living (relative to Orlando and Tampa) while retaining access to the amenities of its larger, more established neighbors. As a result, Lakeland’s real estate market has been buoyed by an influx of commuters looking to capitalize on the city’s central location.

Demand has increased dramatically in recent history as more buyers have looked to Lakeland in order to escape the higher prices of its neighbors, and the attention couldn’t come soon enough. The city, once devastated by the latest financial crisis, is now primed for a breakout in 2019. Lakeland is now the beneficiary of a perfect storm: Prices remain relatively affordable, demand continues to increase, and there’s new construction everywhere you look. Few places, in fact, are as attractive to real estate investors than Lakeland, as the city is not only affordable, but boasts incredible potential for the foreseeable future.

• Median Home Price Forecast: $161,757
• Sales Growth Forecast: 5%
• Price Growth Forecast: 7.4%

Grand Rapids, MI

The Grand Rapids real estate market has officially placed the latest economic crisis in its rearview mirror. In the last year alone, the city’s median home value has increased 13.6%, according to Zillow. Even with the latest surge in home values, however, Grand Rapids remains an affordable place to live, especially for new businesses looking to set up shop.

The old factory town, once reliant primarily upon a modestly appealing furniture manufacturing industry, has since been able to attract an encouraging amount of new companies due to its low cost of living. The Medical Mile, which began with a single medical-related development in the Hillside District of Grand Rapids, has now turned into a designated hot spot for world-class research and educational facilities. Additionally, Amazon recently announced plans to build an 850,000-square-foot fulfillment center in Gaines Township, which is a quick 13-mile drive outside of the city.

There’s no doubt about it: Grand Rapids is benefiting immensely from an influx of new businesses to the area. Perhaps even more importantly, however, it looks as if the city’s economy is perfectly capable of keeping up with the new and impending additions. As a result, it’s fair to say the diverse employment opportunities offered in Grand Rapids will attract more new homebuyers, many of whom will be expected to participate in the market sooner rather than later.

“Our main driver is that we have an extremely diverse employer base,” says Trisha Cornelius, a local real estate agent with Keller Williams. “The job opportunities are endless.”

The promise of a bustling job market has made Grand Rapids a coveted destination for new buyers. As a result, investors that get in sooner rather than later may be able to capitalize on a larger than average buyer pool.

• Median Home Price Forecast: $187,319
• Sales Growth Forecast: 4%
• Price Growth Forecast: 8.2%

El Paso, TX

Of all the markets expected to benefit from their own affordability, El Paso looks to be at the head of the pack. The border city’s abundance of affordable homes has attracted buyers from across the country. Even after appreciating by as much as 5.3% in the last year (November 2017 to December 2018), the median home value in El Paso is still very affordable, and people in more expensive cities are starting to take notice. Therein lies the true draw of the El Paso real estate market: its affordability relative to neighboring cities. More people are moving to El Paso to avoid higher prices brought on by years of appreciation.

“It’s going to be a hot market” in 2019, predicts Alexander Cordova, a real estate agent with One Realty Group in El Paso. “A lot of people are moving into El Paso right now.”

El Paso’s unique combination of affordability and its close proximity to Fort Bliss (the country’s second-largest military base) has brought about a construction “boom.” Several new subdivisions, containing upwards of 150 single-family homes each, have been brought to market to compensate for the influx of buyers. As a result, El Paso real estate investors should be able to ride the recent wave of demand for the foreseeable future

• Median Home Price Forecast: $150,000
• Sales Growth Forecast: 7.9%
• Price Growth Forecast: 2.5%

Methodology For Finding The Best Real Estate Investment Market

Finding the best markets for investing is a practice in subjectivity. What many homebuyers consider objective truths about a particular market, others may be quick to disagree with. More importantly, what one person views as a great place to invest in, another may dismiss as a viable option. That said, there are several positive economic indicators that landed the aforementioned cities on this list, each of which are universally coveted by real estate investors:

• The number of sales of existing homes
• The prices of existing homes
• The volume of new construction
• The local economy
• Population trends
• Unemployment rates
• Job growth
• Median household incomes
• Affordability

Summary

The whole of the national real estate market looks likely to decelerate in 2019, which was to be expected. The blistering pace of the past several years was simply unsustainable. However, there appears to be a small contingent of markets that don’t yet look ready to return to normalcy. In particular, Lakeland, FL; Grand Rapids, MI; and El Paso, TX are each expected to have a promising 2019. Due, in large part, to affordability and several other positive economic indicators, these cities are poised to be some of the best places to invest in 2019.

Key Takeaways

• Today’s best real estate investment markets are boasting very affordable prices.
• The best markets for flipping houses are those benefiting from an influx of buyers who are looking to escape the high prices of primary cities.
• The best real estate markets for investors seem to combine a unique propensity for growth with incredibly affordable prices.